When it comes to maintaining a strong financial plan and healthy financial behaviors, our brains can sometimes work against us. Behavioral biases, mental traps, and neural wirings can all get in the way of setting and meeting financial goals.
Consider recency bias, which is the tendency for people to look to recent events to make decisions about the future. Just because a stock has skyrocketed recently, that doesn’t mean its upward trajectory will last forever. In fact, jumping into the market during a rally could mean you end up buying when prices are high, right before investors bail and prices fall.
Another mental tendency to consider: ego depletion. It’s the idea that people can only exert their willpower for a limited time, and after that, it’s harder to practice self-control. If you have an important financial decision to make, it may make sense to wait until you are no longer feeling depleted.
Here’s a closer look into the ego depletion theory, what it could mean for your finances, and how to overcome it.
What Is Ego Depletion?
The concept of ego depletion hinges on the idea that our willpower reserves are finite, and when we exert self-control for too long, we use up those reserves. Once those are depleted, it is harder to exert self-control, and we’re more likely to make poor decisions.
The term was coined by American social psychologist Roy Baumeister in the late 1990s, though the idea of ego depletion has become popular in recent years. This may be in part because it makes sense intuitively. For example, the experience of eating a healthy breakfast and lunch only to get home from work and eat a bag of chips for dinner is pretty easy to relate to.
However, not everyone agrees with the concept of ego depletion. Some scientists report a lack of consistent data to support the idea. Instead, they have found that motivation is not finite. Rather, it can be subjective, and there are ways to increase it. That can be a good thing as you begin to set long-term financial goals.
If you’re looking to build your long-term financial plan, a money tracker app can help. The SoFi app connects all of your accounts in one convenient dashboard. From there, you can see all of your balances, spending breakdowns, and credit score monitoring. Plus, you can get other valuable financial insights.
Causes of Ego Depletion
There are a variety of factors that may play a role in ego depletion.
• Low blood sugar. If you haven’t eaten and your blood sugar has dropped, it may be more difficult to exert willpower.
• Emotional distress. Temptations may be harder to resist if you’re experiencing a state of mental anguish.
• Unfamiliar tasks. If you are doing something for the first time, you may need to exert more mental energy, which can lead to ego depletion.
• Lack of choice. If you are forced to do a task not of your choosing, you may be more likely to become depleted.
• Illusory fatigue. If you think that a task will be mentally tiring, you may experience ego depletion faster. In other words, ego depletion happens more often when you expect it to. If you think a task won’t tax you too much, you may be able to exert more self-control.
• Cognitive dissonance. Situations in which you do or say something that contradicts your beliefs can tire you out and diminish your self-control.
• Variable heart rate. Those who experience variable heart rate have been found to have less self-control.
The Effect of Ego Depletion on Your Finances
If tasks that require self-control weaken your willpower, you may be less likely to make good decisions when you experience ego fatigue. When it comes to your finances, for instance, you may be more likely to spend money on things that you can’t afford.
Ego depletion could also mean you’re less equipped to make important decisions, such as how to invest your money. For example, if the market is experiencing a downturn, you may find yourself more prone to panicking and potentially pulling out your money. But in doing so, you’ll lock in losses and potentially miss out on a subsequent upswing.
Ego depletion could also mean you miss important deadlines, such as deadlines for funding your 401(k) or IRAs, or tax deadlines.
Lack of sleep makes self-control difficult. Sleep counteracts fatigue and helps reset your willpower reserves, so practice good sleep hygiene. Go to bed at a consistent time. Make sure your bedroom is quiet, relaxing, and dark. Avoid large meals, caffeine, and alcohol before bed.
Manage Stress
Managing stress can help you address the causes of ego depletion as well as its effects. Consider strategies such as deep breathing, mindfulness exercises, eating healthy, and consistent exercise.
Set Goals
Clear financial objectives and the steps you need to reach them can help overcome ego depletion. Consider using SMART goals, or goals that are specific, measurable, achievable, relevant, and time-bound. With these in place, you’ll know what you need to do to accomplish your objectives, and you’ll also be less likely to make moves that stray from your plan.
Plan for the Long Term
Long-term financial plans take your goals, risk tolerance and time horizon into consideration. They are built to account for the natural cycles of volatility. With a long-term plan to refer to, you may be less likely to make rash decisions in the short term, such as panic selling when markets are down or buying when market prices are peaking and may be nearing a fall.
There are a variety of tools out there that can help you set and meet your goals and make financial freedom a reality. It’s worth shopping around to find the ones that work best for you and you’re more likely to stick with.
One to consider: a spending app, which can help you set up a budget, categorize and track spending, make bill payments on time, and track your credit score.
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The Takeaway
The idea of ego depletion centers around the idea that when we exert self-control for too long, we use up our willpower reserves and are more likely to make poor decisions. Learning the causes of ego depletion is a first step in helping you head off rash financial decisions that may work against you. If you recognize that your willpower is fading, take a breather. And when in doubt, refer back to your long-term financial goals and plan.
Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.
See exactly how your money comes and goes at a glance.
FAQ
What is the cause of ego depletion?
Ego depletion can be caused by a number of factors, such as emotional distress, fatigue, low blood sugar, or unfamiliar tasks.
What is an example of ego depletion?
An example of ego depletion might be spending the day hard at work and then coming home, sitting on the couch, and turning on the television instead of pursuing other healthier activities, such as going to the gym.
How do you deal with ego depletion?
There are a number of strategies to combat ego depletion, such as getting enough rest, managing stress, and setting and sticking to long-term goals.
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The average natural gas bill in the United States is $80 to $100 per month. Your monthly gas bills could vary significantly, depending on the time of year, where you live, the size and age of your home, and other factors.
Read on for a breakdown of what can cause your gas bill to go up and down from one month to the next, how to budget for those price changes, and how you might be able to lower your costs in the future.
• The average monthly natural gas bill in the U.S. can be between $80 and $100.
• Factors like home size, age, location, and appliance use significantly impact monthly gas costs.
• Natural gas prices are influenced by commodity costs and distribution expenses.
• Households can manage gas expenses by adjusting home energy use and appliance settings.
• Assistance programs are available to help manage high energy costs for low-income households.
How Much Does a Gas Bill Cost Per Month on Average?
The average cost of gas per month in the U.S. has hovered around $80 in recent years. Your household’s cost could be much lower or higher, depending on your location and its cost of living by state, the size and age of your home, the appliances you use, inflation, and the ever-fluctuating cost of natural gas. Your bill might be much higher, for example, than that of a friend who has the same size house in a state with a warmer climate. And it could be less than what your next door neighbor pays, if your home is smaller or more energy efficient.
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Why Is My Gas Bill Higher Than Usual?
If your gas bill seems higher than usual, it could be that your provider is charging a higher rate. (You can check that by comparing two or more months’ worth of gas bills, or credit card statements if that’s how you pay your bills.) It could also be that you’re simply using more gas because it’s colder outside. Or maybe you’ve been taking more hot showers or running the dishwasher, clothes dryer, or gas fireplace more often. Working from home is a common reason that utility bills are sometimes higher.
If you can’t come up with a reasonable answer for the cost increase, you may want to talk to your gas provider or check your statement to see if your usage is up. But be prepared: The calculations that go into determining your monthly gas bill can be complicated.
In the U.S., natural gas can be priced in a few different ways, including dollars per therm, dollars per British thermal unit (BTU), and dollars per cubic foot.
Here’s what you really need to know: According to the U.S. Energy Information Administration, the price residential customers pay for natural gas is determined by two major factors:
• Commodity Cost: The actual cost of the gas.
• Transmission and Distribution Costs: The costs involved with moving the natural gas from where it’s produced or stored to a local natural gas distribution utility, plus whatever it costs to deliver the gas to customers.
If you live in a state with easy access to residential gas (Alaska, Utah, Washington, Colorado), the monthly rate you pay may be lower than if your utility has to transport the gas a long distance to reach you (in say, Hawaii).
The price you ultimately pay for natural gas in your state, city, or subdivision also may be affected by state regulations, taxes and other charges, availability, seasonal consumer demand, and the amount of competition in your location. (By the way, there’s no relation between the cost of natural gas and the price of gasoline.)
Knowing the natural gas rates in your area can help you understand why your bills might be higher or lower than you expected. But the size of your home and the number of people who live there can also influence your average monthly gas bill. Keeping these things in mind can help you predict your gas usage when you make a budget.
Prices can vary significantly by season, with costs rising if you need to stay warm in cold winter months. According to HomeGuide.com, monthly gas costs in winter can be $120 to $200 versus $35 to $50 in summer.
Here’s a rough estimate of what the average monthly cost of gas could be for various apartment size, according to ApartmentList.com. Apartment costs may well be less than the cost for gas for a house, given that a house is likely to be larger and have more appliances, among other factors.
Average Monthly Bill
Average Annual Bill
Studio apartment
$17.14
$205.68
1 bedroom
$19.71
$236.52
2 bedroom
$38.11
$457.32
2-bdrm, 2 residents
$56
$672
3 bedroom
$54.34
$652.08
Remember that your costs may be much different depending on how many gas appliances you have in your home, how warm you keep your home in the winter, what you keep the temperature set to on your water heater, and other factors.
The top uses for natural gas in U.S. households are heating and water heating. But many homes also use gas for cooking, indoor or outdoor fireplace, clothes dryer, or heating a pool. (Worth noting: Replacing home appliances can lead to greater energy efficiency.)
How Can I Lower My Gas Bill?
Even if you earn the average salary in the U.S., it may be challenging to afford your gas bill at times.
There are several steps you can take to lower your natural gas bill. (You may be interested in lowering your car’s gas bill, too.)
Get a Home Energy Assessment
A professional home energy auditor looks at your past bills for information about your energy use, and inspects your home to pinpoint problem areas and offer money-saving suggestions. Your gas company may offer assessments to its customers, or you may be able to get help finding an energy audit program through your state or local government.
Balance Costs Across the Year
If your local utility offers a yearly budget plan, you may be able to spread out your costs so that your bill is roughly the same amount each month. This can keep bills from becoming overwhelming in months when you use more gas. Or you can use a money tracker app to determine your average monthly cost of gas and set aside the appropriate amount.
Lower Your Water Heater Temperature
When was the last time you even looked at your water heater? Lowering the temperature to 120 degrees can help you save money, prevent family members from accidentally scalding themselves, and protect your pipes. You can also purchase a special blanket or “jacket” to insulate your water heater and make it more efficient.
Look for Leaks
If your doors and windows are getting older, check whether cold air is coming in and warm air escaping. Clear plastic film or weather stripping may be all you need to fix the problem.
Lower the Thermostat
The U.S. Department of Energy recommends setting your thermostat at 68 degrees when you’re home during the winter, and turning it down a few degrees more when you’re away. If you keep pretty standard hours, a programmable thermostat can ensure the house is comfortable when you get home from school or work. And if you work from home, you can lower the temp when you go to bed, or pull on a sweater during the day.
One note: If you get hit with a super-high bill one month (say, due to a polar vortex triggering frigid temperatures), that may be a time to dip into your emergency fund. It’s there to help you cover unexpected expenses
Assistance Programs to Help with Your Gas Bill
If you’re struggling to pay your gas bill, you may be able to get some help from a federal, state, or local government assistance program or from a nonprofit agency. Here are a few options to consider:
Low Income Home Energy Assistance Program
The Low Income Home Energy Assistance Program (LIHEAP), operated through the U.S. Department of Health and Human Services, was created to help low-income households pay high home energy bills. Each state has its own rules regarding who is eligible for help and when and how to apply. (Assistance isn’t made directly to households.) For more information, go to the LIHEAP website.
Low Income Home Energy Assistance Program
The Low Income Home Energy Assistance Program (LIHEAP), operated through the U.S. Department of Health and Human Services, was created to help low-income households pay high home energy bills. Each state has its own rules regarding who is eligible for help and when and how to apply. (Assistance isn’t made directly to households.) For more information, go to the LIHEAP website or call 202-401-9351.
Local Utility Company Programs
Some utility companies offer limited bill-paying assistance programs on their own or working alongside state agencies or nonprofit organizations. Check your local gas company’s website to see if they offer help, or try giving them a call. Your gas company may take special circumstances into consideration when it comes to paying your bill.
SoCalGas, for example, offers past-due bill forgiveness, discounted rates, and extended payment dates for certain qualifying customers. The utility also works to provide one-time grants through their Gas Assistance Fund.
The average cost of gas per month for a house is $80 to $100. The location, size, and age of your home — and, of course, the time of year — can affect your gas bill from one month to the next. So can the number of people in your household and the appliances you use. The rate you pay each month for gas may also fluctuate based on factors over which you have no control. All those things combined can mean that budgeting for your monthly gas bill requires some careful oversight.
Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.
See exactly how your money comes and goes at a glance.
FAQ
How much does the average person pay for gas each month?
The average household pays about $80 to $100 per month for natural gas. Your bill could vary significantly, however, based on location, home size, number of residents, your appliances, whether you work from home, and more.
How much should you budget for gas a month?
One way to determine how much to budget for gas each month is to track your spending, then calculate the average monthly amount based on past bills. You may want to budget an amount that’s a bit higher than in the past, just in case the winter is especially cold or gas rates go up. (If you don’t end up needing the extra funds, you can put the money toward your emergency fund or another bill.)
What’s the average price of natural gas in San Francisco?
According to UtilitiesLocal.com, residential natural gas prices in San Francisco rose slowly but significantly from September 2021 to September 2022. Rates increased by approximately 34% year over year.
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
This content is provided for informational and educational purposes only and should not be construed as financial advice.
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If you’re wondering whether to get a new or used car in the year ahead, there isn’t one single answer. Each car shopper’s situation is likely to vary, and you need to make the decision that best suits your needs and your budget. Factors like the features you’re seeking in a car, price, insurance costs, and depreciation may come into play.
To help you decide where to spend your cash if you plan to buy some wheels, read on. You’ll learn the pros and cons of new and used cars, plus tips for making your choice.
Key Points
• Choosing between a new or used car involves evaluating multiple factors like features, price, depreciation, and insurance.
• New cars provide the latest features and warranties but depreciate quickly and are costly.
• Used cars are more budget-friendly and depreciate more slowly, though they might have reliability issues.
• The purchase decision often hinges on price and depreciation, with new cars losing value faster.
• Personal preferences can dictate the better value; new cars for features and warranties, used cars for cost savings.
Pros and Cons of Buying a New Car
For some people, there’s nothing that can compete with the allure of a bright and shiny new car. However, it’s important to consider the pluses and minuses before making your purchase.
thumb_up
Pros:
• Pristine condition
• Latest features
• Warranty and service benefits
• Multiple financing choices
thumb_down
Cons:
• Immediate depreciation
• Higher price
• Higher insurance costs
• Limited ability to negotiate
Pros
• Pristine condition: With a new car, you don’t have to kick as many tires. New vehicles arrive on dealer showroom floors (and at online auto sales platforms) in pristine condition with very few miles on the odometer, so you don’t have to spend time checking for vehicle inefficiencies and maintenance or repair issues.
• Latest features: Some people may feel “the newer the car, the better.” Here’s why: The auto industry is doing wonders with new vehicle construction, with features like better gas mileage, longer ranges in the case of EV vehicles, and technological advancements that improve vehicle performance. Those upgrades come most notably in car safety, cleaner emissions, and digital dashboards that improve driving enjoyment.
• Warranty and service benefits: New car owners are typically offered a manufacturer’s warranty when they buy a new car, which typically grades out better than third-party warranty coverage on a used car. Additionally, extended car warranties may be available, and auto dealers are more likely to offer services like free roadside assistance or free satellite radio to lock down a new car sale. Those services and features are harder to get with used vehicles.
• Multiple financing choices: It’s often easier to get a good financing deal with a new car vs. a used car. That’s because the vehicle hasn’t been driven and should have no structural problems, maintenance, or repair issues. That’s important to auto loan financers, who place a premium on avoiding risk.
Next, learn about the potential downsides of buying a new car.
Cons
Some disadvantages of a new car purchase might sway a buyer’s decision.
• Immediate depreciation: The moment you drive a new car off the dealer lot, it loses several thousand dollars in value, plus an estimated 20% in the first year of ownership and then 15% annually for the next few years afterward, which is not a fun fact when you are making car payments at the same level month after month.
• Higher price:Saving up for a car is a big undertaking, and you may owe a lot of money on a new vehicle. The average price for a new car is $47,452 as of late 2024, which is a significant figure.
• Higher insurance costs: Auto insurers typically deem new cars as being more valuable than used cars and assign auto insurance premiums accordingly. Also, since new cars cost more, auto insurers prefer to see new auto drivers get full coverage and not minimum coverage.
• Less room to negotiate: New car models may be less negotiable in price than used ones. Because they are the latest shiny new thing, demand may be higher and inventory lower. A dealership may be less likely to knock down the price for this reason, while they might do so on a used car sitting on the same lot.
Used cars offer buyers value and savings, which are attractive benefits to drivers who may not have a big budget, but still want to drive a quality vehicle. However, there are other benefits and downsides to consider as well.
thumb_up
Pros:
• Lower price
• Slower depreciation rate
• Your down payment may go further
thumb_down
Cons:
• Reliability issues
• Fewer options
• Maintenance costs
Pros
• Lower price: No doubt about it, most used cars sell for significantly less than a new car with the same make and model. You learned above that the average new car is retailing for just under $50,000. How about used cars? The average is currently about $25,571, a considerable savings.
• Slower depreciation rate: New cars tend to lose value quickly, as noted above, especially if they’re not properly cared for. But used cars tend to depreciate more slowly, especially if they’ve had regular maintenance, and their sustained value makes them a good resale candidate if the owner wants another vehicle, but still wants to make a good deal when selling the vehicle.
• Your down payment may go farther: Buyers who can manage a robust down payment on a used vehicle can bypass a good chunk of the debt incurred in purchasing the vehicle. It comes down to simple math — if a buyer purchases a $25,000 used vehicle with a down payment of $15,000, there’s only $10,000 left to pay on the vehicle. If a buyer purchases a new vehicle for $48,000, and puts $15,000 down, that buyer still owes $33,000 on the auto loan. Buying a used car could leave more money in your budget to put in a high-yield savings account for emergencies or another purpose.
Cons
When deciding whether to buy a used car or not, these potential disadvantages may also be worth considering.
• Reliability issues: With a used car, an owner may be getting a quality vehicle — or maybe not. A used car may have spent years on the roads and highways, incurring a fair share of dings, dents, and general wear and tear that may have aged it prematurely, particularly if it hasn’t been maintained well.
• Fewer options: You may not get the exact make and model you want. The options can dwindle when it comes to buying a used car. Whereas auto dealers can offer a wide range of makes, models, and colors for a new vehicle, those choices can be significantly limited with a used car, truck, or SUV. That could mean that a used vehicle buyer may have to compromise on different factors, in contrast to someone who is buying new and can often get their dream car, down to the last detail.
• Maintenance costs: You may pay more for vehicle maintenance. Auto repairs often cost more over time and become more frequent, too, as a car ages. So you may well pay more for maintenance and repairs with a used car. With a very old car, finding parts to complete repairs may also be a challenge. In other words, it may take more time and have you spending more from your checking account to keep the car running.
Is It a Better Value to Buy a New or Used Car?
As noted above, there’s no one-size-fits-all answer to whether a new or used car is the better value, but often, a used car is considered a better value. This is because, with a used car, depreciation has already occurred, meaning the price is lower. In this way, you may be able to get more car for the money you’ve earmarked for this purchase, and the car could have a better resale value. Insurance costs may be lower as well.
Is It Easier to Get Approved for a New or Used Car?
In general, it’s considered easier to get approved for a new car loan vs. one for a used car. That’s because new cars are thought to be less risky since they are new, without wear and tear issues. Their value is thought to be simpler to determine.
It’s worthwhile to consider how your credit score could impact which loan offers you might qualify for:
• If you have very good or excellent credit (say, 781 or above), your interest rate as of late 2024 would typically be close to 5.08% APR (annual percentage rate) for a new car or 7.41% APR for a used car.
• If you have good to very good credit (between 661 and 780), your APR for a new car would be close to 6.70% APR and 9.63% APR for a used car.
• If you have a credit score that’s in the fair range to lower good range (between 601 and 660), you’d likely be assessed an APR of close 9.73% APR for a new car and a 14.07% APR for a used car.
• If your credit score was between 501 and 600 (in the lower section of the fair range), you may have a more difficult time accessing financing and could expect to be charged close to 13.00% APR for a new car and 18.95% APR for a used car.
• Have a lower score, in the 300 to 500 range (poor)? You might expect to face challenges getting financing. Those who do offer you a loan could charge close to 15.43% APR for a new car and 21.55% APR for a used car.
Consider Buying a New Car If…
As you make your decision between buying a new or used car, you likely will have your own set of needs and preferences. Here’s when buying new may be your best option:
• If you can afford what is likely to be the higher price tag of buying a new car and loftier insurance costs (as noted above), then you may want to go ahead and buy the latest model.
• You want the latest bells and whistles: If you feel you need an auto with certain new features (whether it’s the design or a safety system), then you may opt for this year’s model.
• If you are financing your purchase, you may be able to get a more favorable APR when buying a new vs. used vehicle. Doing research on how to get a car loan can help you prepare for this path.
Consider Buying a Used Car If…
For some people, though, buying used can be the wiser choice. For instance:
• If you have a fixed budget, a used car will generally offer a lower price and possibly lower insurance costs, too.
• Is there a feature you need but can’t afford in a brand new car? A used car may suit your needs. For instance, if you really need a vehicle with a third row of seats but can’t afford one brand new, that may lead you to a used car.
• If you want to avoid the steep depreciation that comes with buying a new car, a used car may work better for you. It may help to know your car will retain much of its purchase price in the coming years. This could be helpful if, say, you know you’ll be selling the car in a year or two and want to forecast how much you’ll net to put in an online bank account.
By weighing your choices on these fronts, you will likely be able to make the right move, both in terms of the car you buy and how well it fits into the type of budget you use.
As you would with any major purchase decision, you’ll want to shop around, check the book value of preferred vehicles, and look at the car’s maintenance and repair history to ensure it’s in good condition. You may also want to make sure it’s inspected by a trusted mechanic.
The choice between a new and used car likely will depend upon your personal preferences and financial situation. New cars may have the latest features and lower maintenance and financing costs, but they tend to be pricier and trigger higher insurance costs. And they will depreciate rapidly. A used car will usually have a lower sticker price but maintenance costs and higher rates on financing should be noted.
As you think about car financing that best suits your needs, you may want to make sure that your banking partner is the right one, too, and is helping your money work harder for you.
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FAQ
Do used cars require more maintenance vs. new cars?
You may pay more for maintenance on a used car vs. a new one. Typically, older cars need more work than their younger counterparts.
Are used cars a better deal than new cars?
Used cars can be more affordable than new ones, from the sticker price to the insurance costs, and because they don’t depreciate as rapidly as new cars, they can be a better deal.
What are options to buying a new or used car?
Buying a certified pre-owned car, which has been vetted to be in very good condition, or leasing a car are other options you might consider when thinking about buying a new or used car.
SoFi members with direct deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.
As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.
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This content is provided for informational and educational purposes only and should not be construed as financial advice.
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If you drive a car in Texas, you’ll need to make room in your budget for car insurance. The state requires it. The amount you’ll pay for protection depends on a number of factors, such as your driving record, age, car type, and insurer. Understanding the cost of coverage in your area can help as you’re comparing quotes. Keep reading to learn more about the average cost of car insurance in Texas.
Key Points
• The average cost of car insurance in Texas is $1,716 per year, lower than the national average.
• Factors influencing rates include driving record, age, location, credit score, and car type.
• To save on car insurance, compare quotes from multiple insurers and consider a higher deductible.
• Choosing a car with lower insurance costs can help reduce your premiums in Texas.
• Discounts may be available for good driving records, defensive driving courses, and good student grades.
How Much Does Car Insurance Cost in Texas?
The average cost of car insurance in Texas is $1,716 per year, according to a 2025 U.S. News & World Report analysis of cheap car insurance companies. By comparison, the national average is $2,068 per year.
Average Car Insurance Cost in Texas per Month
The average cost of car insurance in Texas is $143 per month, which is $29.33 less than the national monthly average of $172.33. But as the chart below shows, prices can vary greatly among the state’s insurers.
Company
Average Cost Per Month
Average Annual Cost
AAA
$164.33
$1,972
Allstate
$207.08
$2,485
Geico
$116.75
$1,401
Mercury
$124.08
$1,489
National General
$133.92
$1,607
Nationwide
$140.75
$1,689
Progressive
$170.25
$2,043
State Farm
$82.83
$994
Texas Farm Bureau
$71.92
$863
USAA
$111
$1,332
Source: U.S. News & World Report
Average Car Insurance Cost in Texas by City
Where you live can also impact how much you spend on car insurance. The rate of theft, vandalism, and accidents in your area can help online insurance providers estimate how likely you are to file a claim, which can raise insurance costs. In the chart below, notice how rates vary even among 10 major cities in Texas.
Average Car Insurance Cost in Texas by Age and Gender of the Driver
Usually, teen drivers (aka new drivers) can expect to spend more on car insurance than older drivers. Gender is another consideration. Because women statistically get in fewer car accidents and have fewer DUI incidents, they tend to spend less on car insurance. Here’s a look at average annual premiums by different age groups.
Company
17-Year-Old-Female
17-Year-Old-Male
25-Year-Old-Female
25-Year-Old-Male
60-Year-Old-Female
60-Year-Old-Male
AAA
$7,298
$7,950
$1,930
$1,995
$1,635
$1,693
Allstate
$2,937
$3,860
$1,221
$1,277
$826
$826
Geico
$6,154
$6,673
$1,505
$1,637
$1,159
$1,257
Mercury
$3,172
$3,581
$1,330
$1,427
$1,081
$1,301
National General
$4,947
$6,485
$1,604
$1,754
$1,179
$1,263
Nationwide
$10,454
$11,707
$1,988
$2,107
$1,104
$1,124
Progressive
$2,821
$3,533
$1,127
$1,307
$923
$923
State Farm
$2,971
$4,646
$1,545
$1,658
$927
$951
Texas Farm Bureau
$3,697
$4,523
$1,342
$1,406
$1,042
$1,100
USAA
$2,936
$3,147
$1,045
$1,078
$695
$693
Statewide Average
$4,541
$5,397
$1,462
$1,552
$1,049
$1,097
Source: U.S. News & World Report
Average Car Insurance Rates After an At-Fault Accident
Your driving record plays a big role in the auto insurance rates you’re offered. In general, the better someone’s record is, the less they’ll spend on insurance. This table compares how much someone can generally expect to spend on car insurance in Texas when they have a clean record and after just one at-fault accident.
Type of Policy
Clean Record Premium
After One At-Fault Accident Premium
Full Coverage Car Insurance
$1,716
$1,799
Source: U.S. News & World Report
Average Car Insurance Costs for Good and Bad Credit
Some insurance companies examine applicant credit scores when determining rates, as certain credit behaviors can indicate how likely someone is to file a claim. Rates can increase for drivers with lower credit scores. See how the average cost of full coverage car insurance in Texas differs between drivers with good and bad credit scores.
Type of Policy
Good Credit Premium
Bad Credit Premium
Full Coverage Car Insurance
$2,096
$4,088
Source: LendingTree
What Else Affects Car Insurance Costs?
Other factors that can affect car insurance costs include:
How Much You Drive
The more someone drives, the more likely they are to get in an accident simply because they are on the road more often. As a result, driving more miles can lead to higher insurance prices.
When setting a rate, insurance companies often consider how expensive it would be to repair or replace the driver’s car. The higher these costs are, the more the driver will likely pay for coverage.
Amount of Coverage
How much car insurance do you need? The amount may be based on your personal preference or your state’s minimum car insurance requirements. But in general, the more coverage you have, the more expensive your policy will likely be.
Looking to lower your car insurance costs? Consider these tips and tricks for finding a more affordable car insurance policy.
Compare Quotes From Different Insurers
There’s no need to accept the first quote you’re offered. Instead, shop around with a few different auto insurance issuers to see which can offer the most coverage for the best price.
If you’re shopping for a new car, you may want to factor in the cost of insurance. The Insurance Institute for Highway Safety shares helpful information on its website, iihs.org, about the cost of insuring different makes and models of cars.
Consider Whether a Higher Deductible Is Right for You
Choosing a higher deductible often means spending less on monthly premiums. However, it’s important to select a deductible you’ll be able to pay if you ever do need to file a claim.
Ask for Discounts
From taking a defensive driving course to earning good grades as a college student, there are many different ways you may qualify for a discount on your car insurance. If you’re looking to lower your monthly bill — and who isn’t? — then it can’t hurt to ask your insurer if you qualify for any discounts.
The Takeaway
The average cost of car insurance in Texas is $1,716 per year, or $143 per month. The amount you’ll spend on car insurance depends on several factors, including your driving record, age, gender, location, credit score, and insurer.
When the unexpected happens, it’s good to know you have a plan to protect your loved ones and your finances. SoFi has teamed up with some of the best insurance companies in the industry to provide members with fast, easy, and reliable insurance.
Find affordable auto, life, homeowners, and renters insurance with SoFi Protect.
FAQ
How much is car insurance in Texas per month?
The average cost of car insurance in Texas is $1,716 annually. This breaks down to $143 per month.
Is car insurance expensive in Texas?
According to U.S. News & World Report, the average price of car insurance in Texas is higher than all but 12 other states in its 2025 study.
Is $300 a lot for car insurance?
In many cases, the average monthly cost for coverage in Texas is well below $300. But remember, the amount you pay depends on a number of different factors. A 17-year-old woman, for example, could very well pay more than $300 per month largely because of her age and lack of driving experience.
Photo credit: iStock/lightkey
Auto Insurance: Must have a valid driver’s license. Not available in all states.
Home and Renters Insurance: Insurance not available in all states.
Experian is a registered trademark of Experian.
SoFi Insurance Agency, LLC. (“”SoFi””) is compensated by Experian for each customer who purchases a policy through the SoFi-Experian partnership.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
If you travel, you may wonder in which circumstances tips are customary and when they aren’t needed. As you plan a trip, you are likely sticking to a budget and don’t want to overlook this area. But money isn’t the only consideration. You also likely want to do the right thing: In some countries, tipping is a must. In others, it’s optional, and in a few, it’s considered downright rude. Learn the ropes here.
Key Points
• When you travel, tipping may or may not be customary, depending on the country and the situation.
• When tipping is customary, it’s wise to have a bit of cash on hand for this purpose.
• In some countries, restaurant tipping is expected; in others, it’s already included in the bill. In Scandinavia, you might just round up the amount owed.
• In parts of Asia, tipping can be considered rude, so proceed with caution.
• It’s wise to research the country you are traveling to in advance, both to understand local customs and budget appropriately.
Who Should You Tip While on Vacation?
As you travel, there are many people you could tip: the ones who help you into the airport, out of the airport, into your hotel, out again, into a taxi…the list goes on and on. Most people want to be polite and tip appropriately but don’t want to burn through more money than they have to.
To help you manage this aspect of travel, here are some of the people you probably do want to tip, plus some insight into how much to tip.
Luggage attendants can help get your luggage from the curb at the airport to the check-in counter. You can definitely manage the process on your own, but if you’re wrangling young kids, traveling with pets, or simply packed extra-jumbo bags so you’d have loads of outfits to choose among, it’s nice to get help.
Traditionally, it’s polite to tip $2 for your first bag and $1 for any additional luggage. If your bags are legitimately humongous, consider tipping the full $2 for each one. This expense can’t go on your airline credit card or any other kind of plastic, so be sure to keep cash on you.
Note: Airline employees stationed outside the airport may not be able to accept tips, so be prepared for your bills to be rebuffed if one of these workers assists you.
Car valets park and return your car directly from the curb of hotels and restaurants. It’s a major convenience and generally deserves a monetary thank-you. How much to tip? In the $2 to $5 range when your car is returned to you. Tipping when your wheels are first whisked away is generous, though not necessary.
Housekeepers should be tipped each day during your stay, whether you splurged on luxe accommodations or figured out how to save on hotels and booked a rock-bottom rate. Housekeepers freshen your room, replace those damp towels, and otherwise make it a pleasure to return after a long day of visiting museums, lolling on the beach, or whatever else you’ve been up to.
The best method is to leave the cash in a marked envelope (some hotels provide them for just this purpose) or folded in some hotel stationery that is clearly marked “For Housekeeping.” Best practice suggests $1 to $5 each day of your stay.
Room service is a luxurious treat during vacation. Some hotels automatically include a gratuity on your bill. If you don’t see it on your receipt, however, the answer to the “to tip or not to tip” quandary is that it’s likely a good idea to add 15% to 20%, just as you would in a restaurant.
Drivers help in a few different travel scenarios. If you’re taking a taxi or rideshare, consider tipping either a few dollars for short rides and 10% to 20% for long rides. Add an extra tip if the driver helps with your luggage. It’s also customary to tip shuttle drivers, typically from $1 to $2 per person in your party.
Tour guides share their expertise and passion with you, as they lead you around the best snorkeling spots in Tulum or show you the hidden treasures of Paris. Their services can be a memorable highlight of your summer travel plans, so it’s nice to tip them, especially when you have a great experience. An easy rule of thumb is to tip 10% to 20% of the tour’s cost for your group or $5 to $10 per person.
Tipping is by no means a requirement, but in many economies throughout the world (including the U.S.), it’s a way to help workers make ends meet. Many service industry employees are not guaranteed minimum wage.
In fact, in most states in America, there is a much lower minimum wage for tipped employees; hourly rates can dip below $3. While economic policies are a larger discussion, the fact of low wages can help put things in perspective and show the very real value of rewarding workers for a job done well.
For this reason, when budgeting for an upcoming trip, it’s wise to think about your plans, estimate a tip budget, and include that as part of where you keep your travel fund. It’s one of those incidentals that can add up and throw your financial planning out of whack if not accounted for.
Also, since tips are often given in cash rather than plastic (sorry, you can’t reap those credit card rewards this way), you may want to plan ahead to get some foreign currency for this purpose.
You likely do a good amount of research before traveling, scoping out cool hotels, amazing restaurants, and an affordable car rental. So why not, before your next trip, familiarize yourself with tipping customs in different parts of the world? It’ll help you prepare for the costs coming your way and make you feel more comfortable and in control while traveling. Here’s some useful intel:
US
Across the U.S., it’s customary to tip up to 20% for restaurant servers, bartenders, and drivers. In some cities, like New York, the answer to “How much to tip?” is nudging up to 22% or even 25%.
Europe
If you’re planning an epic family reunion trip to France, Spain, Italy, or other European countries, service tips may already be included in your restaurant bill in Europe. Look on the menu; it will probably say so. If it’s not, a maximum 10% tip is recommended. When it comes to your hotel stay, you might tip one euro per bag if a staffer helps you, and leave one euro per day for housekeeping.
Mexico and the Caribbean
Whether you’re heading to Cancun, Mexico City, or the Bahamas, be prepared to tip. Restaurant gratuities usually average between 10% and 20% in Mexico and the Caribbean.
If you’re staying at a resort, remember to keep cash on hand for bellhops, housekeeping, and other employees. Typically, a dollar or two per day/interaction is appropriate.
Central and South America
Heading to Argentina, Bolivia, Colombia, or beyond? Here’s the scoop: The standard tip rate for Latin America is 10% to 15% in restaurants. Some countries (like Brazil) may include the gratuity in your bill, so look carefully at the check before paying for your feijoada. Not sure? There’s no harm asking your server; you’re likely not the first person to do so.
When it comes to hotel staff and drivers, you’ll need a dollar or two (or the equivalent), so it’s wise to have some cash stashed in advance. Also know that tour guides depend on tips, so $10 to $20 of the price is appreciated.
Here’s a travel budget bonus: There are a number of countries you might visit that do not have a tipping custom. In fact, it may even be considered rude or insulting to leave a tip. So before you add a tip when paying with your travel credit card or plunking down cash, double-check local etiquette. Here, some pointers:
Australia
Tipping is not vital when Down Under. Compared to the U.S. and many other countries, Australia has a high minimum wage. That’s one of the reasons why tipping in the service industry is seen as optional.
China
If you are going to be exploring China, know that tipping is actually taboo there. And in some places like airports, it’s illegal because it can be seen as a bribe. Stay polite and safe by skipping the tip.
Japan
Heading to Tokyo, Kyoto, or other locations in Japan? Heads up: Tipping is not customary in Japan and is actually considered rude. Although it may feel odd, when wondering whether to tip or not to tip, just don’t do it. Save your money for more shopping or sushi. The one exception may be if you’ve hired a private guide or translator. In that situation, a small amount of cash, presented discretely, can be appropriate.
Scandinavia
Iceland and Scandinavia typically don’t expect you to tip. You might round up a restaurant tab if there isn’t already a service charge added, but these aren’t countries where a 20% gratuity is routine. Taxi drivers don’t expect tips either.
The Takeaway
Preparing for a trip often involves budgeting, and a key way to wind up on or under your budget is to anticipate what costs are coming your way. Tips are one of those incidentals it’s easy to forget about and can throw your financial planning for a loop. By understanding local tipping customs, you can have a smooth, on-budget trip wherever you may go. What’s more, you’ll know exactly what to expect so you can travel with confidence. You can know how much cash to have on hand or when to add a tip to a restaurant credit card bill
Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.
FAQ
Are tourists always expected to leave a tip?
It depends on where you’re staying. Countries in North and South America, Europe, and Africa typically have tipping customs, particularly at restaurants and resorts. But Asian and Pacific countries like Australia, Japan, and China often do not incorporate tipping into their cultures — and it can even seem impolite.
Who are you supposed to tip at the airport?
In many countries (with China being an exception), it’s polite to tip a baggage handler who carries your luggage to the check-in counter. Some, however, may be unable to accept tips, depending on their employer’s policies.
How much do you tip internationally?
How much to tip internationally varies tremendously. Research each country individually to understand tipping customs. While it’s traditional in many foreign countries, it’s also rude (and sometimes illegal) to tip in others.
Photo credit: iStock/DragonImages
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When you use your SoFi Credit Card to make a purchase on the SoFi Travel Portal, you will earn a number of SoFi Member Rewards points equal to 3% of the total amount you spend on the SoFi Travel Portal. Members can save up to 10% or more on eligible bookings.
Eligibility:
You must be a SoFi registered user.
You must agree to SoFi’s privacy consent agreement.
You must book the travel on SoFi’s Travel Portal reached directly through a link on the SoFi website or mobile application. Travel booked directly on Expedia's website or app, or any other site operated or powered by Expedia is not eligible.
You must pay using your SoFi Credit Card.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
This content is provided for informational and educational purposes only and should not be construed as financial advice.